Speculation
about dwindling oil supplies and
concern about the increasingly detrimental effects of climate change have
pushed renewable energies to the forefront of U.S. energy-policy plans. As a
result, the United States may derive a larger share of its energy and
electricity from renewables, such as wind power, in the years ahead. However,
the rise of renewables will not be as rapid as many believe, and fossil fuels
and uranium[1] will continue to supply the bulk of our energy and
electricity in the near term. It's worth looking at the current and projected
future contributions from renewable energy sources — as well as the widespread
public misconceptions about them.

[The United States] is home to significant reserves
of fossil fuels. Putting aside the issue of whether domestic energy resources
are currently available for extraction — and not counting the abundant natural
resources available to the U.S. in the global marketplace — the Energy
Information Administration's most recent statistics reveal that, as of the end
of 2007, the U.S. possessed more than 21.3 billion barrels of proved oil
reserves,[2] more than 237.7 trillion cubic feet
of dry natural gas, and more than 9.1 billion barrels of natural gas liquids.[3] Even more abundant than our oil and natural gas
reserves is our stock of coal. As of January 1, 2008, our demonstrated reserve
base (DRB)[4] contained 489 billion short tons of
coal. However, because of property-rights issues, land-use conflicts, and
physical and environmental restrictions, the EIA estimates that only half of
the DRB may be available or accessible for mining (262 billion short tons, as
of January 1, 2008).[5] Finally, though not a
fossil fuel, uranium — the primary fuel used to produce nuclear energy — is
abundant in the United States. As of December 31, 2003,[6] given forward costs of $30, $50, and $100 per
pound, U.S. uranium reserves totaled 265 million pounds, 890 million pounds,
and 1,414 million pounds, respectively.[7] Should
renewables not advance as rapidly as many expect or hope, the nation's
fossil-fuel and uranium reserves should alleviate some concern about our
overall electricity and fuel supply.

Given our abundance of fossil fuels and uranium,
their dominance in our nation's electricity supply — they collectively accounted
for just over 91 percent of U.S. electricity generation in 2007 — is not
surprising. The EIA projects that these
fuels will still account for 85 percent of our total
electric generation in 2030.[8] Moreover, though
petroleum generated only 1.6 percent of our electricity in 2007,[9] it accounted for 96 percent of our nation's
transportation fuel.[10]

For many, however, the amount of such reserves and
their collective contribution to our energy supply have no bearing on whether,
or how quickly, we should transition to renewable sources of energy. Shouldn't
we be moving toward renewables anyway, in order to become energy independent?
Ironically, because renewables are not commercially viable technologies, the
goal of energy independence is at odds with reducing our use of conventional
fuels. Unless we are willing to cut our energy use drastically, cutting back on
imported fuel means that our consumption of domestic fossil fuels and uranium
must increase. Moreover, even if everyone agreed that we should replace such
fuels with renewables, significant economic and technological barriers stand in
the way of a quick and easy transition.

Almost half (49.4 percent) of [individuals polled by
the Manhattan Institute] believed that renewable sources of
energy — hydroelectric, geothermal, wind, solar, and biomass — are on track to
replace fossil fuels in the near future. While the possibility of a rapid
increase in the contribution of renewables cannot be ruled out entirely,
current growth trends do not put us on a track to replace fossil fuels anytime
soon.

Given renewable energies' current costs and
technological limitations, as well as the limitations of an electricity grid
and fuel-pipeline system designed for traditional power sources and fuels,
renewables are not expected to be major players in our fuel-supply mix in the
near term. The EIA projects that renewables — including hydroelectric power — will
account for 14 percent of total U.S. electricity generation in 2030.[15] (Wind energy generated 0.77 percent of U.S.
electricity in 2007[16] and is projected to
generate 2.5 percent of U.S. electricity in 2030.)[17]
This translates to an average annual growth rate of 3.2 percent, the largest
increase of any fuel type.[18] The EIA says that
this growth will be "fueled by the rapid expansion of non-hydro renewable
generation technologies that qualify to meet State mandates for renewable
energy production."[19]

An oft-repeated refrain is that renewable energies,
in addition to being cleaner, are cheaper than their conventional fuel
counterparts. Thus, it is not surprising that a majority (53.7 percent) of
[individuals polled] indicated that it is cheaper to generate electricity from
renewable fuels like wind or the sun than it is to produce electricity from
fossil fuels, like coal or natural gas. However, there is a difference between
the cost of renewable fuels and the cost of producing energy from such fuels.

Though wind and solar rays are indeed free, wind
energy and solar energy are costly, compared with the costs of conventional
power generation. Several factors make renewables more expensive, including
high costs of materials and skilled labor, added operations costs to electric
grids that were not built for intermittent resources, and lack of adequate
transmission lines to carry power from remote areas (where the wind and the sun
are most plentiful) to densely populated demand centers. In addition, large
federal subsidies and state renewable energy mandates shift many costs of
renewable energy production from generators to electric ratepayers, disguising
the true costs of these technologies.

In addition, subsidies for wind and solar energy — which together generated less than 1 percent of our nation's electricity
supply in 2007 — are significantly more generous than subsidies for
conventional power generation, considering the amount of electricity generated
by each source.[20] In 2007, wind energy received
$724 million in federal subsidies, valued at $23.37 per megawatt hour (MWh) of
wind-generated electricity, while solar energy took in $174 million, at a
subsidy-per-MWh value of $24.34. By contrast, coal received a subsidy of 44
cents per MWh, natural gas and petroleum liquids received 25 cents each,
hydroelectric energy took in 67 cents, and nuclear power grabbed $1.59.[21] Without these generous taxpayer-funded subsidies,
renewable energies would not be competitive with conventional energy sources.

Like renewable energies, hybrid cars and
alternative-fuel vehicles (AFVs), including electric cars, have become more
prominent in fuel-policy discussions, and they are more prevalent on U.S. roads
than ever.[22] Almost two-thirds (62.7 percent)
of respondents believed that such vehicles will constitute a large portion of
all U.S. automobiles in ten years-but again, projections are less optimistic.

From 2003 to 2006, AFV use increased by an annual
average of just over 6.27 percent[23]-but, with
250,851,833 registered vehicles in the U.S. in 2006,[24]
AFVs made up just one-quarter of 1 percent of all registered vehicles in 2006.
And, according to J. D. Power & Associates, sales of hybrid cars — which run
on either gasoline or diesel and electricity generated onboard — will account for
just 7 percent of the car market in 2015, up from 2.2 percent in 2007.[25]

As our energy economy increasingly relies on
electricity, it is important to assess whether electric cars and plug-in
electric hybrids (PHEVs), which are powered completely and partially,
respectively, by batteries charged by electric grids, are ultimately more
environmentally friendly than hybrid cars or even vehicles that run on
conventional fuels. Opinions vary. "Odds are those batteries won't be recharged
with solar or wind energy," writes John Voelcker in Spectrum, the flagship
publication of IEEE, formerly known as the Institute of Electrical and
Electronics Engineers, Inc.[26] "In most places,
grid power is for many decades going to come from the burning of fossil fuels,
which generate their own emissions."[27] In other
words, if coal plants supply the electric grid with the bulk of the power
needed to charge electric cars, will overall greenhouse-gas (GHG) emissions
increase? Voelcker writes, "The moral of the story: If you're concerned about
the carbon footprint of your vehicle travel, definitely buy a plug-in — if you
live in Norway, Brazil, France, or other areas with largely carbon-free
electricity. Otherwise, have a look at your local grid — and think twice if you
live in a place with lots of old coal-fired power plants. For you, a
conventional hybrid may be kinder to the planet."[28]

On the other hand, many studies reveal that replacing
conventional vehicles and hybrids with electric cars and PHEVs will lead to an
overall reduction in GHG emissions. The American Council for an
Energy-Efficient Economy writes that PHEVs "will reduce both their fuel
consumption and their emissions of various pollutants relative to current
vehicles, including non-plug-in hybrid-electric vehicles" and that "the
advantage of plug-ins over hybrids is large in areas where electricity is
generated with low-carbon fuels, and much more modest elsewhere."[29] Using three scenarios for the level of PHEV market
penetration and three scenarios for electric-sector carbon-dioxide intensity,
the Electric Power Research Institute and the National Resource Defense Council
produced nine possible outcomes for PHEVs' effects on overall GHG emissions.
Their study concluded that annual and cumulative GHG emissions would decline
significantly under each outcome and that each region of the country would see
reductions in GHG emissions.[30]

As politicians and policymakers continue to worry
about climate change, foreign oil dependence, and the availability of domestic
energy resources, renewable energies and alternative fuels will potentially
play larger roles in meeting our country's energy needs. However, because of
the high costs of renewable energies and alternative transportation fuels
relative to their conventional counterparts and because of technological
limitations and transmission-infrastructure inadequacies, conventional power
sources and transportation fuels will remain the dominant suppliers of our
nation's energy for years to come.

[7] See EIA, "U.S. Uranium Reserves by Forward-Cost,"
June 2004, http://www.eia.doe.gov/cneaf/nuclear/page/reserves/urescost.html:
"Uranium reserves that could be recovered as a by-product of phosphate and
copper mining are not included in these reserves. Reserves values in forward-cost
categories are cumulative; that is, the quantity at each level of forward cost
includes all reserves at the lower costs."

[19] EIA, "How Much Renewable Energy Do We Use?," supra,
n. 27. "However, EIA projects renewable energy's share of total worldwide
electricity generation will decrease slightly: from 18 percent of generation in
2005 to 15 percent in 2030. Although worldwide renewable energy is expected to
increase, it will be outpaced by growth in other electricity generation
sources" (EIA, International Energy Outlook 2008 [Tables H7 and H12], June
2008). According to the EIA, "World electricity generation nearly doubles in
the IEO2008 reference case from 2005 to 2030. In 2030, generation in the
non-OECD countries is projected to exceed generation in the OECD countries by
46 percent. Over the next 25 years, the world will become increasingly
dependent on electricity to meet its energy needs. Electricity is expected to
remain the fastest-growing form of end-use energy worldwide through 2030, as it
has been over the past several decades. Nearly one-half of the projected
increase in energy consumption worldwide from 2005 to 2030 is attributed to
electricity generation in the IEO2008 reference case. Since 1990, growth in net
generation has outpaced the growth in total energy consumption (2.9 percent per
year and 1.9 percent per year, respectively), and generation is expected to
increase at an average annual rate of 2.6 percent through 2030 as the growth in
demand for electricity continues to outpace growth in total energy use (Figure
52)" (EIA, International Energy Outlook 2008 [Chapter 5-Electricity], June
2008, http://www.eia.doe.gov/oiaf/ieo/electricity.html).

[21] See EIA, "How Much Does the Federal Government
Spend on Energy-Specific Subsidies and Support?," http://tonto.eia.doe.gov/energy_in_brief/energy_subsidies.cfm.
Robert J. Michaels, professor of economics at California State University,
Fullerton, writes, "According to the U.S. Energy Information Administration,
wind's costs per kilowatt-hour hit bottom in 2002 and have since increased by
60 percent. In 2004, the levelized cost of a coal-fired kilowatt hour was 3.53
cents, compared to 4.31 cents for nuclear, 5.w47 for gas and 5.7 for wind.
According to a study by Gilbert Metcalf of Tufts University for the National Bureau
of Economic Research, removing subsidies to nuclear and wind power takes the
former to 5.94 cents and the latter to 6.64" (Robert J. Michaels, "Hot Air and
Wind," National Review Online, December 20, 2007,
http://article.nationalreview.com/?q=MTlhN2I4ZDhmZTg2N2NmM2EzNmExYTEwNWRjNzU3Mzk).

[22] Hybrid cars are powered by electricity and either
gasoline or diesel. Alternative-fuel vehicles include electric cars and cars
that can run on natural gas or an E85 blend (85 percent ethanol / 15 percent
gasoline). Hybrids are not considered AFVs, according to the Department of
Energy. See EIA, "Table V1. Estimated Number of Alternative Fueled Vehicles in
Use in the United States, by Fuel Type, 2003-2006," May 2008,
http://www.eia.doe.gov/cneaf/alternate/page/atftables/afvtransfuel_II.html#inuse.

[23] EIA estimates the following number of AFVs in use
in the U.S. from 2003 through 2006: 533,999 (2003); 565,492 (2004); 592,125
(2005); 634,562 (2006). See EIA, "Table V1. Estimated Number of Alternative
Fueled Vehicles in Use in the United States, by Fuel Type, 2003-2006," supra,
n. 38. "In 1997, some vehicle manufacturers began including E85-fueling
capability in certain model lines of vehicles. For 2006, the EIA estimates that
the number of E-85 vehicles that are capable of operating on E85, gasoline, or
both, is about 6 million. Many of these alternative-fueled vehicles (AFVs) are
sold and used as traditional gasoline-powered vehicles. In this table, AFVs in
use include only those E85 vehicles believed to be used as AFVs. These are
primarily fleet-operated vehicles" (ibid.).